At the technical level, NemID is a combination of two different systems.
The first part is an OCES system using permanent keys. This is what you use when you log into government and private websites. The OCES system is a refinement to the government's Digital Signature. The other part is a special bank system using one-time keys. This system is only used when you log into Netbank. NemID automatically switches between the two systems.

The first time you log into a service using NemID, a security warning will be displayed. The security warning asks you to decide whether you trust content from DanID A/S (the developer of NemID) to be secure.
Once you acknowledge that you trust programs from DanID A/S, your browser will load a java applet.
This applet establishes a secure two-layer SSL connection to DanID's servers, through which you transmit login information.

When you log into Netbank, you must enter your self-chosen user ID, CPR no. or NemID no., and your self-chosen password. Assuming this information is entered correctly, you will be asked to enter an OTP from the code card.
At the technical level, a short-term key is generated between you and DanID which is used to verify transactions during your Netbank session. The key is only used during this one session, for the duration af your logon and is then deleted.